Title II is the Brownfields Revitalization and Environmental Restoration Act of 2001 (the "Brownfield Amendments"). It clarifies and establishes new defenses to CERCLA liability and contains a number of incentives that are designed to promote the reuse and development of brownfields sites.

New Due Diligence Standards. The Brownfield Amendments direct EPA, by January 11, 2004, to promulgate permanent standards and practices for purposes of the "innocent purchaser" defense requirement to carry out all appropriate inquiry into the previous ownership of property.

The amendments also contain interim "appropriate inquiry" standards and practices. For commercial property purchased before May 31, 1997, courts should take a variety of factors into account when determining if a defendant conducted an appropriate inquiry, including (1) any specialized knowledge or experience, (2) the purchase price, (3) commonly known or reasonably ascertainable information, (4) the obviousness of the presence or likely presence of contamination, and (5) the ability to detect the contamination by appropriate inspection.

For property purchased on or after May 31, 1997 and until EPA promulgates its due diligence standards, the appropriate inquiry requirement may be satisfied by performing a Phase I environmental site assessment in accordance with the American Society for Testing and Materials "E1527 Standard Practice for Environmental Site Assessment: Phase 1 Environmental Site Assessment Process."

For residential property or other similar use property purchased by a nongovernmental or noncommercial entity, a person may satisfy the "all appropriate inquiry" standard by conducting a site inspection and title search that reveal no basis for further investigation.

In each instance the defendant must have take reasonable steps to stop a continuing release, prevent a future release, and prevent or limit exposure to previous releases.

The New Bona Fide Prospective Purchaser Defense. A Bona Fide Prospective Purchaser ("BFP") will not incur Superfund liability based solely on its status as an owner or operator of a site if the person does not impede the performance of a response action or natural resource restoration. BFP means a person or tenant of a person who acquires ownership of a facility after January 11, 2002 and establishes certain conditions by a preponderance of the evidence.

The BFP must establish, among other things, that (1) all hazardous substances disposal occurred before the acquisition, (2) the person satisfied the innocent purchaser "appropriate inquiry" standards, (3) the person complied with all release reporting requirements, (4) the person took "appropriate care" to stop any continuing release, prevent any threatened future release, and prevent or limit exposures to any previously released hazardous substance, and (5) the person is not a PRP or affiliated with any other PRP at the property.

The BFP must also cooperate in any response actions or natural resource restoration, comply with land use restrictions and not impede the effectiveness or integrity of institutional controls, and comply with any request for information or administrative subpoena issued by EPA under its CERCLA authority.

Contiguous Property Owners. New section 107(q) to CERCLA, "Contiguous Properties", basically codifies EPA's policy toward owners of property with contaminated aquifers. The new section provides that a person owning property contiguous or similarly situated to a contaminated site that is or may be contaminated by a release or threatened release of a hazardous substance from that contaminated site shall not be considered a CERCLA owner or operator solely by reason of the contamination if it can satisfy the extensive conditions set forth in the Brownfields Amendments by a preponderance of the evidence.

EPA may issue assurance to any person who qualifies for the contiguous property owner defense that no enforcement action will be initiated under CERCLA and provide protection against claims for contribution or cost recovery.

Brownfields Funding Program. The Act increases the funding for assessment and cleanup of brownfields sites from approximately $96 million to $250 million a year for fiscal years 2002 through 2006. Of this amount, $150 million will be allocated to localities, states and tribes to support site assessment and cleanup. Another $50 million will be used to establish and enhance state and tribal cleanup programs. $50 million will be available to clean up sites contaminated with petroleum.

To be eligible for funding, the property must fall within the new CERCLA definition of a "brownfield site". The term refers to real property where the expansion, redevelopment, or reuse may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.

The Brownfield Amendments fills an important gap by allowing petroleum-contaminated sites to be eligible for brownfield financial assistance if they meet certain conditions. The site must either fall within the definition of a brownfield site or be administratively included within that definition; or EPA or a state must determine that the site poses a relatively low risk compared with other petroleum-contaminated sites in the state, there is no viable responsible party to assess, investigate, or cleanup a site, and the site is not subject to a corrective action order.

Minimum Standards for State Response/EPA Enforcement. New CERCLA section 129 provides that where a response action has been completed at an "eligible response site" in accordance with a state program specifically governing response actions for the protection of public health and the environment, EPA may not use its authority under CERCLA section 106 to compel a cleanup or 107 to recover response costs unless the circumstances set forth in the Brownfield Amendments are present.

An "eligible response site" includes sites that fall within the definition of a brownfields site and those sites that EPA determines are eligible for brownfields financial assistance on a case-by-case basis. Sites specifically excluded from this definition are NPL sites and those sites where EPA has conducted or is conducting a preliminary assessment and site inspection, and where EPA determines after consulting with the state that the preliminary score of the site makes it eligible for inclusion on the NPL. However, if EPA determines not to take any further action, the property may be classified as an eligible response site. In addition, sites that pose a threat to a sole-source drinking water aquifer or a sensitive ecosystem may not be considered an "eligible response site".

If EPA decides to take a response action at an eligible response site, the agency must notify the state of the proposed action at least 48 hours before taking the action. The state has 48 hours to notify EPA if the eligible response site is or has been subject to a cleanup conducted under a state program or if the state is planning to abate the release or threatened release, and identify the actions that are planned. If the state fails to respond within the 48-hour period, EPA may take immediate action.

However, if EPA determines that more than one of the exceptions to its enforcement bar applies, the agency may take immediate action after notifying the state.

NPL Deferral Of Brownfield Sites. The Brownfields Amendments authorize EPA to defer final listing of an eligible response site on the NPL if requested by a state under certain circumstances, including where (1) EPA determines that the state or another party under an agreement or order from the state is conducting a response action at the eligible response site in compliance with a state response program that will be protective of human health and the environment, and provide long-term protection of human health and the environment; or (2) the state is actively pursuing an agreement to perform a response action at the site with a person that the state has reason to believe is capable of conducting a response action.